A previously registered investment adviser and previously registered broker Gary Pevey, was the subject of a customer dispute disclosure filed on the allegation of high risk and fraudulent investments, according to an investigation by attorney Alan Rosca.
Broker misconduct attorney Alan Rosca, of Rosca Scarlato LLC law firm is investigating circumstances surrounding the above mentioned customer dispute involving Gary Lyle Pevey. Concerned investors are encouraged to contact attorney Rosca by calling 888-998-0530, via email at arosca@rscounsel.law, or leave a message though the contact form on this page for a free discussion or evaluation of potential options.
Between the period of March 2011 and February 2018, former broker Gary Pevey was in the employment of Mutual Securities, a Financial Industry Regulatory Authority (FINRA) member firm. Investors may also note that between February 2002 and May 2019, Pevey was also a regsiterd investment adviser with Wealth Design Group in Sacramento, California.
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Gary Pevey Was the Subject of Customer Dispute Disclosures
According to the information on his FINRA Brokercheck reports, the latest customer dispute disclosure was initiated in April 2020. In this dispute, the client alleged high risk and fraudulent investments of a real estate security while Pevey was registered with Mutual Securites. The customer further alleged inadequate supervision. In September 2020, the client who was seeking $100,001 in damages accepted $26,206 to conclude this matter.
In August 2018, another customer filed a FINRA dispute making similar allegations involving a promissory note while Pevey was with Mutual Securities. The customer requested $171,000 in alleged damages, in addition to bargain damages lost opportunity costs, mode portfolio damages, prejudgment interest, costs, attorneys’ fees and punitive damages. In May 2019 this dispute concluded in a $134,893 settlement, of which $120,000 represented the amount individually contributed by former broker Gary Pevey.
Gary Lyle Pevey Was the Subject of a FINRA Regulatory Action
Former broker Gary Pevey was sanctioned by FINRA in a regulatory action instituted against him in January 2019. In the regulatory action, FINRA alleged that Pevey participated in private securities transactions without giving notice to, or gaining the approval of his firm.
This is an act which was a violation of FINRA regulations and his member firm’s written supervisory procedures. According to the reports, FINRA in their investigation made findings alleging Gary Lyle Pevey solicited investors to purchase promissory notes relating to a purported real-estate investment fund.
The purported real estate investment fund is allegedly the Woodbridge Securities which have been described as a Ponzi scheme. The FINRA investigation also alleges that he sold approximately $1.11 million in the investment fund’s promissory note to investors and received $40,027 in commissions. Some of the investors were clients of his member firm.
In settling this, Gary Pevey without admitting or denying the allegations consented to an Acceptance, Waiver & Consent (AWC) order which suspended him in all capacities for 12 months from January 2019. He was also required to pay $40,027 in disgorgements and $10,000 for civil and administrative penalties.
Woodbridge Ponzi Scheme Allegations
The Woodbridge securities were alternative securities sold by Woodbridge Group Companies founded by Robert Shapiro and headquartered in Florida. Robert Shapiro through the group conducted an alleged Ponzi scheme which defrauded over 8,400 investors, comprising largely of elderly investors, in amounts running in excess of $1.2 billion.
The company promoted the securities by claiming to loan funds to commercial property owners who pay annual interests between 11-15%. The company distributed marketing materials that allegedly contained false information to attract and retain investors. In addition to this, the company also allegedly procured sales agents and brokers, which it paid $64.5 million in commission, to represent the investments as low risk and conservative. The securities did not perform as touted and the company was allegedly paying dividends and interests to investors through the money gotten from new investors.
Finally, it is important to note that, as of the date of this article, there has not been a finding of liability as to the complaints or allegations mentioned in this article, unless otherwise indicated. Any reader should also read the original sources hyperlinked in this blog for accuracy, including any BrokerCheck report and/or record of any disciplinary or regulatory action. Those sources are incorporated by reference into the text of this blog, and are the governing materials in case of any inconsistencies or typos in this blog.
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Securities Lawyer Investigating
The Rosca Scarlato LLC law firm represents investors who lose money as a result of investment-related fraud or misconduct and is currently investigating conduct related to customer allegations involving Gary Lyle Pevey and his alleged participation in the Woodbridge Ponzi scheme.
The firm takes most cases of this type on a contingency fee basis and advances the case costs, and only gets paid for their fees and costs out of money recovered for clients. Attorney Alan Rosca, a securities lawyer and adjunct professor of securities regulation, has represented thousands of victimized investors across the country and around the world in cases ranging from arbitrations to class actions.
Concerned Gary Pevey investors who believe they suffered losses related to customer dispute disclosures or alleged involvement in the Woodbridge scheme, may contact attorney Alan Rosca for a free no-obligation evaluation of their recovery options, at 888-998-0530, via email at arosca@rscounsel.law, or through the contact form on this webpage.